Fixed income planning
fixed income
The stable part still has to be designed
“Fixed income” describes the payment pattern, not the safety of the capital. The two are frequently confused.
cash flow you can plan around
Instruments with a defined payment schedule, used to meet known needs on known dates.
risks that still apply
Credit risk, interest-rate risk, reinvestment risk and liquidity risk all remain present.
what it involves
Four risks worth naming plainly
Credit risk is the possibility that the borrower does not pay. A higher coupon is not a bonus — it is the market pricing a higher probability of exactly that. This is why an unusually attractive rate deserves more scrutiny, not less, and why credit ratings are a starting point for a question rather than a guarantee of an answer.
Interest-rate risk affects the market value of an existing holding. When prevailing rates rise, instruments already issued at lower rates become less attractive and their market price falls. Held to maturity that may not matter; sold early it very much does. Longer maturities are more sensitive to this than shorter ones.
Reinvestment risk is the quieter one. When an instrument matures or pays out, the proceeds have to be redeployed at whatever rates exist then — which may be materially lower than when the original commitment was made. A plan built on today's rates continuing indefinitely has a gap in it.
Liquidity risk is the practical one. Some fixed income instruments cannot be sold quickly at a fair price, particularly in smaller quantities or in stressed conditions. If money might be needed early, that possibility belongs in the structure from the start rather than being discovered at the point of need.
Laddering is the most common structural response: rather than committing everything at one maturity, holdings are spread across staggered dates. Something matures regularly, which softens both reinvestment risk and the liquidity problem, and reduces the consequence of having committed at any single point in the rate cycle.
how we help
Matched to the need, not to the headline rate
The right structure follows from when the money is needed and how much certainty that need requires.
map the cash flows
Establish what is needed, when, and how firm each of those dates is before choosing any instrument.
assess the credit
Look at issuer quality, security, and concentration — rather than reading a high coupon as good news.
ladder and review
Stagger maturities so something comes due regularly, and revisit as rates and needs change.
our approach
What working with us looks like
It starts with you — not with a product.
step
understand
We start by learning about your goals and your situation.
01
step
assess
We look at what you already have before anything else.
02
step
structure
We map out which types of investments might actually fit.
03
step
implement
We put the agreed structure in place, in a sensible order.
04
step
review
We revisit the plan as your goals or circumstances change.
05
is this for you
When this helps, and when it does not
The stable, income-oriented part of a portfolio. ‘Stable’ describes how it behaves relative to equity, not an absence of risk.
Worth a conversation if
- You need predictable cash flows on dates you can name
- A portfolio is heavily weighted to growth assets and the balance needs thinking about
- Money is required at a known point and cannot be exposed to a bad year
- You want credit quality and maturities looked at deliberately rather than by default
Probably not, if
- You are looking for equity-like returns with bond-like behaviour
- ‘Fixed’ is being read as guaranteed — issuers can and do default
- The whole portfolio is going here to avoid volatility, whatever the horizon
faqs
Questions about fixed income planning
No, and this is the most important misunderstanding in the category. Fixed income describes a defined payment pattern, not a guarantee of capital. The issuer can default, the market value can fall if rates rise, and some instruments are difficult to sell quickly. Different fixed income instruments carry very different levels of risk.
A higher rate generally reflects higher risk being priced in — weaker credit quality, longer commitment, or poorer liquidity. Comparing rates without comparing those factors is comparing incomparable things. The question is which combination of rate, credit quality, maturity and liquidity suits the job the money has to do.
It spreads the timing risk. Instead of committing everything at one point in the rate cycle and having it all mature together, holdings are staggered so something matures at regular intervals. That gives you periodic access to funds without a forced sale, and means you are reinvesting gradually across different rate environments rather than all at once.
There is no general answer, and any figure quoted without knowing your situation is guesswork. It depends on what the money is for, when it is needed, what other assets you hold — including property and business interests — and how much variation in value is acceptable to you. That is the conversation rather than a rule of thumb.
Risk and important information
Fixed income investments carry risk, including credit risk, interest-rate risk, reinvestment risk and liquidity risk. The term “fixed income” refers to a defined payment structure and does not mean capital is protected or returns are assured. Issuers can default and market values can fall. Nothing on this page is investment advice or a recommendation to buy, sell or hold any instrument. Please read all offer documents carefully before investing.
let's talk
Let's start with a conversation
There's no obligation, no pressure — just a conversation about where things stand and where you'd like to go.